Insuring Your Electric Vehicle: What You Need to Know
As electric vehicle (EV) sales continue to surge across the U.S., understanding the unique aspects of EV insurance is increasingly important. While the market for electric vehicles is growing, insuring these cars comes with its own set of challenges.
Does It Cost More to Insure an Electric Vehicle?
Generally, yes. EVs tend to be more expensive to insure than their gas-powered counterparts. This is primarily due to:
- Higher Vehicle Values: Although some automakers offer more affordable EVs, the average EV still costs significantly more than the average internal combustion engine (ICE) vehicle. As of August 2024, the average transaction price for new EVs was $56,575, compared to $47,870 for ICE vehicles, according to Kelley Blue Book.
- Potentially Higher Parts Costs: EV components might be pricier to replace or repair. Plus, repairs often use original equipment manufacturer (OEM) parts, which means you’re paying a premium.
- Specialized Repair Needs: EVs often need to go to specialized shops with specific equipment and trained technicians. These facilities tend to charge more for labor to cover their investment.
- Increased Claim Payouts: Due to higher parts and labor expenses, EV repairs can cost significantly more. CCC Intelligent Solutions found that the average EV repair exceeds the cost of a gas-powered vehicle repair by over 45 percent, increasing claim amounts.
- Extended Repair Times: EVs typically spend more time in the shop than gas-powered cars. The average repair time for EVs is about 15.6 days, versus 12.7 days for gas-powered vehicles, as per a recent report.
- Higher Claim Frequency: A LexisNexis Risk Solutions report from 2024 revealed that EVs have a 17 percent higher claim frequency than overall passenger vehicles.
How Much Does Electric Car Insurance Cost?
The national average cost of car insurance is $2,678 for full coverage and $799 for minimum coverage for gas-powered vehicles. However, insuring an EV is typically more expensive.
The following table compares average premiums for some of the top EV models in 2024:
Note: These are sample rates and can vary significantly.
Where Can I Buy Electric Car Insurance?
You can find auto insurance for your EV from almost any major car insurance provider; the process is the same, and EV policies include the same coverage options, such as:
- Liability
- Comprehensive
- Collision Coverage
Beyond Tesla’s proprietary insurance product, there are no major carriers that specialize in specific EV insurance. However, certain companies offer unique discounts and benefits to EV and hybrid owners. Travelers and Lemonade both offer discounts for “green vehicles,” and you may save with other companies too.
Tesla Insurance
Tesla owners may consider Tesla Insurance, directly through the company’s mobile app. Its features may provide a discount. These include:
- Telematics, which monitor your real-time driving habits to rate your car insurance policy.
Tesla Insurance is only available in Arizona, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia.
How to Save on Electric Car Insurance
If you already have an electric car or plan to buy one, here’s how to save on insurance:
- Shop around for quotes: Comparing quotes from multiple providers can help you get more affordable rates.
- Take advantage of discounts: In addition to electric vehicle-specific discounts, EV owners may qualify for standard discounts, such as good driver, good student, and bundling discounts.
- Consider Government Incentives: You may qualify for rebates, tax credits, and other incentives for purchasing an EV, such as those for EV charging home systems. The federal government offers tax credits up to $7,500 for many EV models.
Frequently Asked Questions
*Are electric cars more expensive to insure?
Generally, yes; they are pricier to buy and repair. Insurance providers may charge more for coverage.
*Do all insurance companies cover electric cars?
Yes, most insurers offer coverage for EVs like traditional gasoline-powered vehicles.
*What is the cheapest electric car to insure?
In recent analyses of average quoted premiums, the Nissan Leaf and Volkswagen ID.4 were among the most affordable EVs to insure.
*Do insurance providers offer discounts for electric vehicles?
Some insurers, like Travelers and Lemonade, do.
*How can I find the cheapest car insurance for my electric vehicle?
Comparison shopping is often the best approach to finding the right policy. Get quotes from various insurers to determine the best policy for you.
Methodology
Bankrate utilizes Quadrant Information Services to analyze March 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits: $100,000 bodily injury liability per person $300,000 bodily injury liability per accident $50,000 property damage liability per accident $100,000 uninsured motorist bodily injury per person $300,000 uninsured motorist bodily injury per accident $500 collision deductible $500 comprehensive deductible To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2023 Toyota Camry, commute five days a week and drive 12,000 miles annually. These are sample rates and should only be used for comparative purposes. Model: To determine cost by vehicle type, we evaluated our base profile with the following vehicles applied: BMW i4, Ford F-150 Lightning, Ford Mustang Mach-E, Hyundai Ioniq5, Kia EV6, Rivian R1S, Tesla Model 3, Tesla Model X, Tesla Model Y, Volkswagen ID.4 and Toyota Camry (base).
